Straight Drive

Bhushan Mhapralkar

Commercial vehicle sales in April 2017 lacked excitement. Marking a transition to BSIV, it was expected that April would indeed be a dull period for the commercial vehicle industry. Described an industry leader that it marked the end of a tumultuous period, and the beginning of an all-new period. Such times rarely come he expressed, hinting at the challenges that lie ahead. If demonetisation led the GDP to shrink to 6.1 per cent in the January-March quarter last fiscal, and the GVA to plummet to 6.6 per cent (lowest since FY2014-15), the current quarter does not look very promising either. With GST knocking at the door, it is going to be a new and rare period indeed. The current form of GST, with four-five tiers, has already deviated far from the concept of one tax, one nation. Trucks and buses, with other automobiles, have been placed in the 28 per cent tax bracket. Tyres, which currently attract Excise Duty and VAT of 27.5 per cent, have been placed in the 28 per cent bracket. Clarity on how the tax on raw material will affect the prices of finished goods is yet to be had. There’s also the issue of countervaling duties the states could impose with fuel out of the purview of GST. Some states are known to have already taken this route to shore up revenues. Moves like these pose a danger to GST even before it has found a footing. The very purpose it was engineered for would soon be lost.

With GST knocking at the door, it is going to be a new and rare period indeed”.